A new campaign has been launched which aims to end the “injustice” suffered by 5m retirees stuck in the “annuity trap.”

The ‘Your Pension Your Choice’ campaign has urged the Government to revise rules which, it says, “unfairly trap 5m retirees in the UK.”

The movement called for all retirees, no matter when they retired, to have the same pension freedoms.

Its says those who retired before April 2015 do not have the same pension freedoms as those who retired after, because they were forced to buy an annuity, which is an insurance product that pays out a monthly income to retirees for the rest of their lives.

Campaigners criticised annuities for being “often low paying” and said they “restrict the ability of retirees to access their pension pot for emergency reasons, e.g. for vital housing repairs, social care costs or helping to put grandchildren through university.” 

The Government’s Pension Freedoms law, introduced in 2015, gave those who retired after April 2015 greater flexibility and enabled new retirees to purchase an annuity, invest in a drawdown account or cash out their entire pension pot.

Since its introduction savers have cashed in £9.2bn from their pension pots.

But, despite this, the Government still denies pension freedoms to people who retired before April 2015.

In the last Parliament the Government agreed to extend freedoms to this cohort but then U-turned on the plans.

It recently said it had “no plans to review this decision.”

To mark the start of the campaign today a Change.org petition was launched and a cross-party group of MPs, led by Scottish Conservative Paul Masterton, launched an Early Day Motion in Parliament.

Mr Masterton, MP for East Renfrewshire, said: “Freedom and choice was a revolutionary pension policy which allowed individuals greater flexibility to tailor how they received retirement income to better fit their circumstances.

“But because the Government has backtracked on a promise to extend that ability to individuals who retired before the changes came into place, more than 5m people are losing out on the ability to access their pension pots in the way they please.

“Many of them are now stuck with very small, poor value annuities which aren’t their main retirement income and provide no meaningful benefit.

“I welcome the launch of this new campaign and look forward to working with them to make the case to Government for this vital change.”